Fury as EU exports more sugar

Brazil, Australia and Thailand protested yesterday at what they saw as a deliberate policy by the European Union to increase exports of sugar despite having agreed to cut them.

The EU's move went against the spirit of trade liberalisation three months ahead of a World Trade Organisation meeting in Hong Kong where trade ministers have promised to thrash out a wide-ranging deal on reducing trade subsidies and tariffs, the three countries said in statements to the WTO.

In May the WTO ruled that the EU was breaking trade law by exporting five million tonnes of subsidised sugar onto world markets, depressing market prices and hurting the incomes of farmers in poor countries. It ordered the EU to cut sugar exports to 1.2m tonnes, something Brussels agreed to do but over a period of time.

Last week the European commission announced it was switching a further 2m tonnes from the domestic to overseas markets this year, meaning it will export about 7m tonnes. Brazil said: "Instead of reducing its subsidised exports of sugar, as recommended by the [WTO's] dispute settlement board more than four months ago, the EC is further increasing the quantity of its illegal subsidised exports to the detriment of all other sugar producers and exporters in the world." It added: "Hardly any of us could find a more deleterious way to express the gap between words and deeds."

Australia said in a separate statement: "Action to increase exports - during a period in which steps are required to reduce exports - detracts from the predictability and security afforded by the multilateral trade system," Thailand said Brussels' decision "was undertaken with the full knowledge that such measures constitute an infringement of its commitments."

The three countries said the EU's actions called into question its commitment to making progress in multilateral trade negotiations and made a mockery of the WTO's dispute settlement procedures.

Oxfam was also critical of the EU's move. "Millions of poor farmers will suffer as a result of the EU manoeuvre. They are being selfish, short-sighted and unforgiveably opportunistic." said spokesman Luis Morago.